“Geography is destiny” is a quote attributed to Napoleon Bonaparte. The USA is a good example of this, being a country blessed with abundant natural resources, separated by two oceans, and bordered by weak neighbors.
In the current day and age, the idea that “Demography is destiny” might be more valid. I recently came across a table comparing the dependency ratio among developed countries. This is the ratio of retired and people under 16 compared to the workforce. I think this is a great indicator of the future market potential for the food service industry. The higher the dependency ratio the less attractive a market is long term.
Which are the least attractive countries, i.e. the ones with the highest dependency ratios? Hungary, Italy, France and Japan top the list which is not all that surprising. All of these countries have serious economic problems, low birth rates and lots of retirees.
Which markets look the best? Mexico, Turkey, Ireland and the USA are the most attractive. Mexico is number one by far with the lowest dependency ratio given the young population and has strong economic growth as well. When you add in the developing world, India, Indonesia, the Philippines and Sub-Saharan Africa come to mind with very young populations.
So if you are a global restaurant chain, the USA still looks attractive over the long term but it is critical to get a secure foothold into markets like Mexico, Turkey, India, Indonesia, the Philippines, Ireland and South Korea to mention a few. China is certainly promising over the next 10 years but the population is aging and the lack of a social safety net means Chinese consumers must conserve their cash.
I once took a class from the famous Management Professor, Peter Drucker, who always spoke about demographics as critical to understanding economics and markets. I guess he was right!